Five Dumbest Things on Wall Street: Oct. 31

Remorse for Rubin

Just go to Washington, Bob. It's not like you're doing much good at Citigroup ( C).

Or anything at all for that matter.

Former U.S. Treasury Secretary and current Citigroup board member Robert Rubin is an adviser to Democratic presidential candidate Barack Obama, giving rise to questions about whether he'll return to politics.

Rubin, though, says no. "I'm not going back to Washington," Rubin told CNN's Fareed Zakaria on Sunday. "Senator Obama knows that it is not my view of my own life to go in that direction."

We at the Five Dumbest Lab wish Rubin would reconsider. Not for the good of the country, but for the good of Citi.

The reputation of the former Goldman Sachs ( NYT) golden boy has been somewhat tarnished since he left the nation's Capitol. Rubin, the man credited with saving the financial world in the 1998 currency crisis, and who President Clinton once called, "the greatest secretary of the Treasury since Alexander Hamilton," joined Citigroup in October 1999, when the stock was trading at $36 a share. Now it's at $13 and the prognosis does not look positive.

Since Rubin's arrival, Citigroup has suffered through (in no particular order): a research scandal (remember Jack Grubman?), unfavorable ties to Enron, CEO Chuck Prince's subprime lending spree, thousands of employee layoffs and, most recently, billions of dollars in writedowns due to the housing bust.

In reward for overseeing -- or perhaps overlooking -- this high profile string of failures, Rubin has pocketed more than $118 million in salary, bonus and stock-based compensation. Surely he can live off his savings if he takes the pay cut to $191,300 as Obama's Treasury Secretary.

Citi's latest strategic decision may be its biggest blunder. It was revealed this week that Goldman Sachs CEO Lloyd Blankfein called Citi CEO Vikram Pandit in September about a possible merger, but the Citigroup CEO immediately rejected the proposal.

Pandit surely must have informed Citi's senior counselor that Rubin's old firm was interested in getting together. As for us, we don't understand why Blankfein made the call in the first place.